MARKETING CHANNELS topic DESIGN MARKETING CHANNELS FOR NEW PRODUCTS, THE CASE IN NGUYEN VAN XE’S POTTERY PRODUCTION BASE

THE UNIVERSITY OF DANANGUNIVERSITY OF ECONOMICS MARKETING CHANNELS Topic DESIGN MARKETING CHANNELS FOR NEW PRODUCTS, THE CASE IN NGUYEN VAN XE’S POTTERY PRODUCTION BASE Class : 41K12.3 -

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THE UNIVERSITY OF DANANG

UNIVERSITY OF ECONOMICS

MARKETING CHANNELS

Topic DESIGN MARKETING CHANNELS FOR NEW PRODUCTS, THE CASE IN NGUYEN VAN XE’S POTTERY PRODUCTION BASE

Class : 41K12.3 - CLC Lecturer: Ph.D Ngo Thi Khue Thu

Msc Nguyen Phuong Thao

Danang, April 2018

GROUP MEMBERS

download by : skknchat@gmail.com

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Nguyen Thi Hang (Leader)Nguyen Ngoc Quynh AnhNguyen Thi My My

Le Thi Diem MiTran Thi Duyen

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1 INTRODUCTION 4

2 GENERAL INFORMATION ABOUT THE SALE POINT 4

2.1 Producer 4

2.2 Business situation 5

2.3 The relationship between the production base and intermediaries 6

2.4 Series of products selected 6

2.4.1 Features, opportunities for decorative ceramic products 6

3 LITERATURE REVIEW 6

3.1 In-depth interview 6

3.2 Designing the channel 6

4 FIELD OBSERVATION REPORT 7

4.1 POEMS framework 7

5 INTERVIEW PROCESS REPORT 8

5.1 Select a product line 8

5.2 A set of interview questions 9

5.2.1 Selection of respondents 9

5.2.2 Question list 9

5.2.3 Form of interview 10

6 RESULTS AND DATA ANALYSIS 11

6.1 Answer sheet for the owner and manager: 11

6.2 Answer sheet for the end-users and retailers: 14

6.3 Data Analysis 19

6.3.1 The most important Insights 19

6.3.2 Analysis data for end – users and retailers 19

6.3.3 Source 19

6.3.4 The level of customer satisfaction 19

6.3.5 Suggestions for decorative ceramics 19

7 SOLUTIONS 20

7.1 Online channel 20

7.1.1 Website 20

7.1.2 Facebook fanpage 21

7.2 Offline channel 22

7.2.1 Showroom 22

7.2.2 Hotels and restaurants 22

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1 INTRODUCTION

In today market economy, many companies and production bases in ourcountry have a tendency to offer their products through some intermediaries Thiswould reduce the costs, create the highest efficiency in the channel, thereby deliverproducts to the target market in time and meet customer needs

In fact, promotion activities like advertising and discount are only beneficial

in the very short run Other businesses can rapidly imitate these kinds of strategies

of the companies, so companies that follow these strategies will quickly lose theircompetitive advantages As a result, businesses today are focusing more ondeveloping a better distribution system in order to gain sustainable development Acomplete distribution system with rational distribution policies will help thebusiness succeed

Pottery villages are traditional trade villages in many areas of Vietnam.Thanh Ha pottery village has been existing in Hoi An for 500 years It is not well-known place until Hoi An has become an attractive destination of many foreigntourists Nevertheless, the village is still not popular in the eyes of local people Atpresent, pottery villages are only distributed in Hue, Danang, Quang Nam and veryfew other provinces

Thanks to the complete distribution system, the company has acquired areputation for its products However, through our observation, the process of thedistributing products has not yet reached maximum efficiency Therefore, we want

to make Thanh Ha pottery village become traditional craft village like Bat Trang,Dong Trieu

With regard to the aim of preserving and develop traditional craft villages,our group choose a pottery production base in Thanh Ha pottery village as our salepoint for our project This is the production base of Mr Nguyen Van Xe

2.1 Producer

- Nguyen Van Xe base is a pottery production of Thanh Ha pottery village

- Address: Thanh Ha pottery village, Hoi An, Vietnam

Thanh Ha is known as a famous pottery village in Hoi An In recent years,Thanh Ha is a place that many visitors cannot ignore when visiting to Hoi An This

is a favorable opportunity for establishing the business in this area

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2.2 Business situation

Through observing the sales point and conducting the interview with Mr.Nguyen Van Xe, the owner of the production base, our conclusions are:

- The traditional business items of Nguyen Van Xe factory are household pottery

- The current distribution system of the facility is

Nguyen Van Xe production base only distributes through traditional channelswith 12 wholesalers In addition, the base also produces decorative products whichare ordered from restaurants and hotels However, the number of decorativepotteries sales is still so small

Although there is a large number of tourists visiting the village, the facilitiesare not yet utilized Since the base mainly sells products with large size andpersonal belongings, customers cannot buy them because it is difficult to bringthem home Besides, the establishment has produced some products for tourism liketoys but does not gain a new breakthrough in revenue In addition, other ceramicmanufacturing become the competitors of the base as they try to attract visitors with

a practical experience by making their own products for tourists

During the interview, Mr Son, Nguyen Van Xe’s son reveals that he intends to develop decorative ceramics instead of just producing household ceramics He also

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wants to introduce the private brand of the home base as the family brand becausemost customers only know the general brand named Thanh Ha pottery village butdoes not know the private brand of a production base Nguyen Van Xe in Thanh Ha.However, he does not know where and how to start.

2.3 The relationship between the production base and intermediaries

All 12 wholesalers live in Hoi An, close to Nguyen Van Xe ceramic factory

so it is very easy for picking up products The relationship between themanufacturer and 12 wholesalers is very good However, 12 intermediaries tend togive money back to Nguyen Van Xe’s base only after selling the products, makingthe production base stagnant in the revolving capital

2.4 Series of products selected

After the observation and interviews, we realize that household ceramicshave a good development while decorative ceramics initially encountered manyproblems Hence, setting up distribution channels for decorative ceramics is anurgent task that needs to be addressed

2.4.1 Features, opportunities for decorative ceramic products

Nowadays, people would love to engage closely with the nature and ancientliving spaces Ceramics are among the favorite items mostly used to decorate in therestaurant, folk cuisines as well as hotels Some households also enjoy using thesesmall decorative items for desks and indoor spaces Besides, ceramic decoration issmall size, easy to transport, aesthetic and high level of sophistication

3.2 Designing the channel

Generally, a channel can be designed based on 7 steps: recognizing the need for a channel design decision, setting and coordinating distribution objectives, specifying distribution tasks, developing possible alternative channel structures, evaluating the variables affecting channel structure, choosing the “best” channel structure and selecting the channel members (Bert Rosenbloom, 2012) In this case, the owner

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wants to develop a new product The existing channel already has significant elements for this kind of product, the owner only need to modify it to fit with new products.

Mr Nguyen Van Xe’s pottery production base is located in Thanh Ha potteryvillage, Hoi An, Quang Nam province Main products of the base are householdpotteries From 10 days to 15 days, 12 wholesalers will go to the production base,pick up the potteries, carry them around, and sell them to retailers in Hue, Da Nangand Quang Nam

In addition to household potteries, the production base also makes decorative potteries which are ordered from restaurants, hotels, homestays and other decorative potteries These entities than sell these items to tourists visiting the village.

4.1 POEMS framework

People

Employees: There are 5 employees working at the production base and living

near the production base They all have worked there for a long time (from 5-10years)

Wholesalers: The production base makes oral contract with 12 wholesalers Every 15

or 20 days, 12 wholesalers go to the production base to pick up the potteries and bring them around than selling to retailers in Hue, Da Nang and Quang Nam These wholesalers have strong business relationship with the production base.

Consumers of the sale point mostly are tourists visiting the village, but the

sales for them are not many Sometimes, restaurants and hotels managers come here

to order potteries for decorating or for food serving dishes

Objects

Household potteries: are mainly traditional products of Nguyen Van Xe’s

production base They account for 80% revenue of the production base This kind ofproduct has a full channel system so it is impossible to change the whole system

Decorative potteries are potential products that are developed by Mr Xe’s

son At this time, Mr Nguyen Van Xe’s son are considering building a new channelsystem for this kind of product Therefore, our group decided to help Mr NguyenVan Xe to design the channel

Pottery is made by forming a ceramic (often clay) body into objects of a required shape and heating them to high temperatures in a kiln which removes all

the water from the clay

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Environment: The production base is located in Thanh Ha pottery village,

near the river Up to now, wholesalers and consumers go directly to the production

to buy the potteries The owner does not have to do any intermediate activities

Messages and media: Not any production bases in the village has their own

brand which many people know about that Only Thanh Ha pottery village has its

name on Google map and research engines Tourists just wander around the village

and come to any the production bases

Service: Whenever tourists go by, Mr Nguyen Van Xe and his son will

perform pottery making process by hands and by the wheel potter Then, tourists try

to make potteries by themselves

PEOPLE

EmployeesConsumersWholesalers

SERVICE

ENVIRONMENT

Pottery villageProduction base

Known from the ancient town Potter's wheel & Kiln

5.1 Select a product line

Product line: Ceramic decorationToday, people tend to love the close to nature or return to the old living space

Ceramics are the favorite decorative items today in the restaurant, folk cuisine as

well as the hotel

Small decorative items for desks, indoor space are all family favorite Ceramic

decoration is small size, easy to transport, aesthetic, high level sophistication.

5.2 A set of interview questions

5.2.1 Selection of respondents

- Sources of selection: Businesses or individuals who trade in or use pottery decorations

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- Selection criteria: The respondents are currently trading or using pottery decorations.

- Method of selection: selection of respondents Particularly, they are:

production base owner

o Mr Nguyen Van Son - Mr

Nguyen Van Xe’s son, manager as well as the heir of

the production base

o Mr Nguyen Van Hung -

o Mộc Garden (Duong Tu Minh Street)

o Shop souvenirs Ms Hien (Hoi An ancient )

o Room Casa Hostel (An Thuong 4 Street)

o Nguyen My My (Individuals - Quang Nam Province)

5.2.2 Question list

5.2.2.1 Apply for the owner and manager

Question 1: Do you have any difficulties in finding intermediates?

Question 2: Do you have to deal with inventory?

Question 3: Do intermediates pick up stock at the specific time or at therandom time?

Question 4: Do you want to extend market size and find more intermediates?

Question 5: What do you thing about the online channel?

Question 6: Do you offer delivery service (how and how far?)Question 7: If we help you to set up the online channel, who can be themanager?

5.2.2.2 Apply for end-users and Retailers

Question 1: Hi, are you doing the business, distributing, trading or usingdecorative pottery products or products related to decorative ceramics such

as stone lotus, cactus etc? Is it good or difficult? If you are having difficulty,what problems do you have? (For example: products, freight, design, etc) Ifyou are a user, how do you buy these decorative items?

Question 2: Do you know the place of production or distribution ofdecorative ceramics that you are buying through the sources? Can you tell usthe reasons why you choose them?

Question 3: Have you ever had a problem of storage or inventory ofdecorative ceramics? And if so, how did you handle it?

Question 4: Do you have any comments on decorative ceramic products?

(design, style, size, etc)Question 5: What kind of purchases that you find more convenient (online oroffline)?

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Question 6: If there is a factory producing decorative pottery with original price and diversified designs, are you willing to buy?

5.2.3 Form of interview

- Discussing face to face with respondents about the decorative pottery

- Using a cell phone to record the interview and use the notebook to record it

- Interview time: 45-60 minutes for each interview on 10/04/2017 and 11/04/2017

- Location: Da Nang city and Quang Nam province

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Không có nhiều hàng

tồn kho cho lắm

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6 RESULTS AND DATA ANALYSIS

6.1 Answer sheet for the owner and manager:

Đáp viên Mr Nguyen Van Mr Nguyen

Van

Xe – production Son - Mr

Nguyen Câu hỏi base owner

Van Xe’s son

Mr Nguyen Van

Mrs Lan

-Mrs Sang -

wholesaler retailer Hung -

employee

Cũng không khó khăn

Bên đồ gia dụng cũng

lắm Vì xưa giờ làm không khó lắm Mìnhqua 12 trung gian có 12 nhà buôn quenquen biết rồi, cứ đến rồi, tháng nàotháng là họ đến lấy đến lấy hàng

1

hàng thôi Họ không mưa thì ít chứ mùa hètrả tiền ngay mà đến làm không kịp cho họkhi nào bán được lấy Lâu lâu cũng cóhàng thì gửi tiền sau khách sạn, nhà hàng,

quán ăn đến đặt

Không có tồnkho nhiều

Khi nào họ

2 thiếu thì họ nói mình tiếng mình làm

thêm cho họ

3 Cứ đầu tháng thì họ Thì đầu tháng

họ đến đến lấy hàng thôi, chứ lấy hàng thôi em mình

không có chở Thiếu thì báo mình hàng ra cho bán

buôn mình làm thêm

Với tùy theo thời tiết

Trả lời tương tự như Không

khó tìm Hồi

chứ chừ

có bạn hàng rồi, lấyquen rồi

Trả lời tương tự như Cũng có

hàng tồn

nhiều Cũngtùy mùa màbên lẻ muanhiều hay ít

Trả lời tương tự như Mình là

bán sỉ chochú Xê họ mà Mình phải

chở hàng qua cho họchứ

Không có trunggian con Cô làbán cho khách

lẻ, là phụ nữ sausinh hay lâu lâu

có nhà hàng tớiđặt…

Bên cô thì hết hàng

mới lấy tiếp nên

hầu như không có

dư Khoảngtầmhơn 1 thánglấymột lần

Không

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